Russia’s largest gas and oil company, Gazprom, has announced that it will stop supplying gas to Europe for three days at the end of the month through its main pipeline, Nord Stream 1, for maintenance work. Now there is concern that the pipeline will be shut down until further notice, as a result the price of natural gas jumps by 19% and reached 291.5 euros ($291.9) per megawatt hour, for the fifth week in a row.
The unplanned maintenance work on the Nord Stream 1 pipeline, which runs under the Baltic Sea to Germany, deepens the energy crisis in Europe, which needs new sources for the winter. Gazprom said the three-day shutdown was due to the only remaining gas compressor on the pipeline requiring maintenance, but the move would cause further disruption especially for Germany, which is heavily dependent on supplies from Moscow to keep its industry running and functioning. The expected date for work on the pipeline’s maintenance was Between August 31 and September 2.
Germany has already been forced to give Unifer – its biggest Russian gas importer – 15 billion euros in aid after Russia drastically cut gas flows, forcing it to buy gas elsewhere at much higher prices. Germany’s broader economic impact was highlighted in Friday’s producer price data, which in July posted the highest ever increases, both in annual and monthly terms, as energy costs skyrocketed.
The Russians have already operated the Nord Stream pipeline at only one-fifth of its capacity, raising fears that Russia could completely stop the flow of gas ahead of the winter heating season and make it difficult to fill storage facilities. Germany has made a concerted effort to fill its storage facilities, at a level of 78.19% as of August 17, slightly more than 75.89% compared to the EU as a whole.
Gazprom stated that after the completion of the maintenance, and “in the absence of technical malfunctions”, the gas flows will resume to the extent of approximately 33 million cubic meters per day. However, this is still only 20% of Nord Stream’s full capacity of 167 m3 K per day. Gazprom claims that the maintenance work will continue, but in Germany they say that this is a pretext to harm their economy.
Senior German politicians have rejected the proposals according to which gas shortages can be alleviated by resuming the flow through the suspended Nord Stream 2 pipeline, which the Kremlin proposed as a solution, on the other hand, the Germans claim that this is a move by the Kremlin to cause an increase in energy prices. “I strongly recommend that we spare ourselves the humiliation of always asking (Russian President Putin) for something that we are not going to get,” said Kevin Kuhnert, a senior official in the German government, “Dependence on him must end once and for all.”
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